Council members seek ban on cellphone 'reverse vending machines'

An ecoATM is shown at a demonstration in Washington. City Council members in Baltimore want to ban such devices, but the company says it is being unfairly targeted.

An ecoATM is shown at a demonstration in Washington. City Council members in Baltimore want to ban such devices, but the company says it is being unfairly targeted. (SAUL LOEB / AFP/Getty Images)

Justin Fenton and Luke Broadwater, The Baltimore Sun

Faced with a rash of reported mobile device thefts, local lawmakers want to ban the automated purchasing kiosks that have cropped up at area shopping centers and allow customers to instantly resell phones, tablets and music players.

The proposals have drawn criticism from ecoATM, one of the largest players in the emerging industry, which says its devices — sometimes called "reverse vending machines" — are being unfairly blamed for a theft problem that is much larger than its business.

Baltimore City Councilman Bill Henry this week introduced the ban, and he and other council members say police officers have told them the kiosks are driving device theft. The police chief in Washington has been a vocal opponent of the machines, and city legislators say they are urging counterparts across the state to follow suit.

Ryan Kuder, director of marketing for San Diego-based ecoATM, said that stolen phones represent less than one-tenth of 1 percent of the company's business. He said ecoATM helps police track customers who resold stolen phones. The machines are monitored by security cameras and require sellers to submit a driver's license and thumbprint.

Kuder noted that the company marked a milestone this week — the purchase of 1 million phones — and he insisted: "When we collect a stolen phone, we return it."

"Stolen phones have been a big black hole [for law enforcement]," Kuder said. "They get stolen, they get sold, and nobody knows where they go."

Police in the area say device thefts have indeed been a problem, and transit police this spring made a public awareness push to prevent mobile device theft after some brazen thefts of devices from passengers.

"We do have a high number of cellphone robberies," city police spokesman Anthony Guglielmi said.

But Guglielmi said the idea that they end up being sold at ecoATMs may only be a hunch. Police in the city and county have only linked one theft to the kiosks. In that case, according to a Baltimore County spokeswoman, the stolen phone sold at a county ecoATM kiosk was recovered by police in cooperation with the company.

Guglielmi said ecoATM officials last week approached Police Commissioner Anthony Batts, who criticized such kiosks after a conversation with D.C. Police Chief Cathy Lanier. Company officials said they would sit down with police to explain how their company works.

There are no ecoATMs in the city and eight around the Baltimore beltway. One at Mondawmin Mall was shut down after drawing crowds that overwhelmed the shopping center's staff.

Still, council members say police officers in their districts have been telling them that the kiosks are problematic.

"Unfortunately, along comes a technological advancement that allows people to sell MP3s and stolen phones without any human interaction whatsoever," Henry told council colleagues when he introduced the bill.

Councilwoman Mary Pat Clarke said police told her that thieves are stealing from city residents and turning cellphones and devices in for cash at county malls.

"These kiosks have upped the crime rate in Baltimore City, because if you steal a cellphone you just go out to a mall in the county and you get cash," Clarke said. "You get cash from this machine for putting in the cellphones that you stole. It's increasing the car break-ins and the thefts of cell phones."

Council President Bernard C. "Jack" Young said he believed the kiosks were increasing the incentive for thefts from school children, as well.

"This is a big problem around our schools. A lot of our school children are being robbed of their cell phones," he said.

Ryan O'Doherty, a spokesman for Mayor Stephanie Rawlings-Blake, said the mayor "appreciates councilman Henry's concern," and wants to hear from Batts on the issue.

Drew Spaventa, another company official, said many cities work closely with ecoATM but others have a "knee-jerk reaction that has to do with the people who hear there's stolen phones, and a kiosk that buys them back."

Then, he said, the perception that ecoATM is to blame "takes on a life of its own."

Kuder acknowledged that some phones may be sold that haven't been reported stolen, but said "we can't find a stolen phone that nobody reports to us." Still, he said, even without a serial number, ecoATM allows police to look through its transactions for types of phones sold during specific periods of time.

"We can help find a list of suspects," Kuder said. "The fact of the matter is, we generate data on a scale that nobody else generates."

Henry said he was partnering with lawmakers in Baltimore County to have the devices banned there as well. County Councilman David Marks said he plans to meet with Chief James W. Johnson on the issue. Henry said he's hoping Anne Arundel County will follow suit.

In Anne Arundel, County Council Chairman Jerry Walker said he hadn't heard of the issue before. He wasn't aware of any of his colleagues working on legislation related to the kiosks.

Baltimore City Councilwoman Rochelle "Rikki" Spector said she would take the matter to the Maryland Association of Counties to try convince other local governments to ban the kiosks. "This unfortunately has legs and spreads. I'd like to see all the counties around do the same thing," she said.

Henry said one kiosk at Mondawmin Mall was removed after Baltimore police raised concerns about thefts.

"According to police, when it was operating, there was a line out the door of people trying to sell used cellphones to this machine for cash in hand," Henry said. "While the Mondawmin Mall management was willing to voluntarily remove the machine at the request of the police, there remain several of these machines in operation at malls around the edge of our city in Baltimore and Anne Arundel counties."

A spokesman for Mondawmin Mall, Greg Harris, said the mall sought to have the ecoATM kiosk removed after a few weeks in November because it attracted large crowds that were "difficult to manage," He said he had no information about the sales being traced to thefts.

"It became a challenge to handle the crowds using the kiosk," Harris said.

Kuder, of ecoATM, said the large number of people in line isn't evidence they were seeking to sell stolen phones.

"You're looking at the people who go to Mondawmin Mall and assuming they're criminals," he said. "Ninety-nine-point-nine-five percent of the time they're honest, hardworking people looking to get value."